Everyone agrees: the future of Europe lies in German hands. Berlin is now the de facto capital of the European Union, the place where the crucial decisions are taken. They speak about this shift in Brussels and Paris and certainly in Athens, Rome and Madrid. Everywhere in fact – except Germany.

The Germans don't dispute the facts. They know that they alone can afford to bail out the Greeks and that everyone else in the eurozone, including France, has lost their triple-A rating. They know that it has fallen to Germany to establish the near €500bn (£416bn) fund that will deal with future debt crises, the catchily named European Stability Mechanism that starts in July. They know that the new rules that David Cameron "vetoed" but did not stop in December will see Germany's 16 fellow eurozone members have their budgets checked – "their homework marked" as one Eurocrat put it – in Berlin.

If fate had played out differently, if Nicolas Sarkozy had emerged as the master of Europe, we would never hear the end of it. If Britain somehow found itself atop the European pile, its prime minister determining the political future of the continent, the British press would revel in the glory. But there is no such triumphalism in Germany. The change in fortune is barely discussed and certainly not celebrated. In the Europe of 2012, Germany stands as a reluctant Goliath.

In conversations with politicians, journalists and others this week, no one denied that a shift had taken place – that the "Merkozy" notion of France and Germany in joint charge no longer fits the current situation of solo German strength. But they also agreed that this was a change few in the country wanted to trumpet.

Could that be because this new power comes at a heavy price, in the form of the billions Berlin will have to shovel towards ailing Greece? No. Dieter Janecek, a Green rising star who leads the party in Bavaria, told me the Greek bailout still feels "abstract" to most Germans. The standard of living remains high, with unemployment falling. Germany came through the post-2008 downturn all but unscathed. This week VW workers each received a €6,000 bonus, reward for another good year. So Germans are not hurting.

Besides, the Greek economy is no bigger than that of Hessen, a middling German province. So long as the contagion doesn't spread to Spain or beyond, bailing out Greece is manageable. And, even if some Germans do resent the Greeks, thanks to the pro-EU consensus that unites the main parties, there are few politicians around to exploit or even articulate that resentment.

So it's not the cost that makes Germany keep quiet about its current dominance. The explanation goes deeper. "It's because of our history," says Janecek. Later a leading publisher tells me power makes her fellow Germans "uneasy", that the message drummed into them from childhood is that "a powerful Germany is a dangerous Germany". When I meet Jochen Arntz, features editor of Süddeutsche Zeitung, he says: "We make ourselves smaller than we are. This is a German habit that we've learned over the last 50 or 60 years – for reasons we all know."

The war ended closer to 70 years ago, but the shadow it casts is still long and inescapable. Stroll to the Marienplatz in the centre of Munich and you'll find branches of Diesel, Zara and the inevitable Starbucks. But you'll also see a tour guide addressing a group of students from across Europe, holding up an archive photo of a Marienplatz rally in the 1920s. There, circled, is the face of Adolf Hitler. Nearby, a klezmer quartet play the haunting melodies of a European Jewish culture whose extinction was sought by the movement Hitler launched on these very streets.

That legacy informs every aspect of German political culture. On Sunday the German parliament will elect Joachim Gauck as the country's new president. A previous incumbent, Horst Köhler, resigned in 2010 after he had made a statement that in Britain or France would have barely turned a hair: he said that sometimes military force is needed to protect the country's economic interests, defending sea lanes and the like. Meanwhile, a defence minister, who also later resigned, became embattled over his refusal to use the word "war" to describe German combat in Afghanistan. "War is a four-letter word in Germany," says Arntz.

Both episodes turned on an ingrained post-1945 German wariness of anything that might smack of aggression or a desire to dominate, anything that might smack of the Nazi past. In German politics the key divide over Libya last year was whether the country should cast its UN vote against intervention or merely abstain (it did the latter). The attitude extends even to personal conduct. When the chief executive of Deutsche Bank flashed a V-for-victory sign after a successful court verdict, he was roundly condemned for such a crass display of arrogance, for behaving as what one pundit describes as "the ugly German".

Some of this is a fear of what the rest of the world will think, but much of it is a German fear of itself – of what Germany is capable of. This helps account for Merkel's durable popularity – her low-key, cautious style is suitably unthreatening – and explains why the politician who remarked last year that "Suddenly Europe is speaking German" was so hastily shut up.

That same fear is also why Germany needs Europe. For them, Europe is not just a matter of trade arrangements, it is also a solution to a deeper problem. As one observer told me, "a European identity is more comfortable than a German identity", given the bloody history. Postwar Germany has been Europe's willing Gulliver, happy to be tied down by the bonds of commerce and shared sovereignty, hoping that those EU strictures might save it from its darkest self. That is why there is alarm at signs that both Britain and, in a different way, Turkey are walking away from the European project. Germany needs the European dream to endure.

There is a risk that Germany's neighbours, including us, are forgetting this need of the Germans. That amid all the talk of bailouts and fiscal tightening, we forget what the European community was for and the demons that made it necessary. But Germany has not forgotten. Goliath is still scared of his own strength.